US President Barak Obama has fanned the wind of public anger against BP
for its massive Gulf oil spill. But the US could well reap a whirlwind
for the manner of its official response to the disaster. There are
The first is the sheer hypocrisy of US demands
for mammoth compensation for livelihood losses incurred by its citizens,
given the persistent refusal of the US (and other) oil majors, miners
and assorted multinationals to compensate for environmental havoc they
have created in other countries.
The most outrageous example,
which smacks of downright racism as well as corporate greed, is the puny
compensation for the upward of 20,000 killed and an estimated half
million more suffering permanent health damage from the gas leak at the
Union Carbide plant at Bhopal, India, 1984. The Indian government shares
some of the blame for failing to achieve justice for Bhopal, but the
brutal fact remains that Indian lives are less a fraction of American
livelihoods – and that the US continues to provide sanctuary against the
extradition to India of Union Carbide's then-boss, Warren Anderson.
if Bhopal was a frightening but fortunately so far uniquely devastating
event, oil spills are a continuing occurrence. A similar-sized spill to
the BP one in Mexican waters in 1979 mainly affected Mexico. The US
suffered too but its attempts to demand compensation ran up against
Pemex's claim to sovereign immunity as a state-owned company.
US and other foreign companies don't even bother with such get-outs
when they cause the spills along the coasts of Nigeria or in the forests
of Ecuador on a much bigger scale even than the BP event in the Gulf of
Mexico. These spills get scant media attention. As for compensation –
well, forget about it.
The US's action in strong-arming BP into
paying out at least US$20 billion for livelihood compensation and
cleanup is setting a wonderful example to governments, individuals and
communities in the rest of the world to demand their own compensation
for US corporate misdeeds abroad. If the US courts continue to refuse to
recognize foreign claims against US companies – those as those of
Bhopal victims – one can well imagine that other methods will be used.
again, President Obama has provided a fine example of circumventing due
process to extract cash from BP as part of his campaign for the
November elections. Forget the rule of law, the compensation limits
established by legislation, the established procedures for allocating
liability and assessing damages. No, just have the president act like a
South American populist demagogue and decree that BP is entirely guilty
and must pay the above sum. The view of one Republican that BP had been
"shaken down" is accurate enough.
The administration has also
behaved as though decisions made by government agencies with personnel
appointed by his predecessor have no validity. How else to interpret
allocating some of the blame and cost to government bodies which
authorized exceptions to safety procedures in the rush to get more oil
out of the Gulf? BP, like the others, was encouraged to "Drill baby,
In the eyes of many, BP deserves to be shaken down. But
the way it was done, the focus of blame on the one player in the mess
who was known to be cash rich, offers a splendid example to aggrieved
parties in other countries to go after US and other corporate giants,
particularly if they know they can lay their hands on cash flow from oil
and other ventures.
Mining and tobacco companies are obvious
targets but there are plenty of others such as seed and agricultural
chemical companies, pharmaceutical giants, even snack food and powdered
milk producers who will, justly or not, be targeted, if not by
governments then by NGOs particularly in the developing world.
US has behaved in a way which further underlines its exceptionalist
view of itself. At the same time it undermines the reasonable reputation
of the US as a society which believes in the sanctity of legal and
constitutional process. That opens opportunities for those in other
countries who have always viewed western insistence on laws and due
process as a weapon to be used against them. The US has shown a fine
precedent of politics overriding law that others can follow.
will also be watching all this with interest – and worry. For sure,
Chinese companies have been mainly investing in oil in Africa and
elsewhere rather than the Gulf of Mexico. The value of those leases will
go up as Gulf ones go down. But if the US can take this action towards
BP, a company close to the bosom of its closest European ally, what
might it do to China's investments in the US if congressional anger
boils over or the president faces a crucial election when China trade,
not an oil spill, is the center of US attention?
unilateralist actions of the administration of George W Bush did enough
damage to the international reputation of the US. Obama promised to
reverse that. But it seems that under pressure he is capable of behaving
similarly. He even compared the oil spill to the 9/11 attack on the
World Trade Center in New York and the Pentagon in Washington, DC. Is
the corollary that we are now to get Obama versions of the Iraq
invasion, Guantanamo and general assault on civil liberties served up,
first over oil issue then over China and its $2 trillion in dollar